Election uncertainty affecting building projects

Architectural billings index falls in July, still positive

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The uncertainty surrounding the presidential election is causing some funding decisions regarding larger construction projects to be delayed or put on hold.

“The presidential election that lies ahead is definitely impacting the progression of larger construction projects and funding decisions,” said Jessica Reinert, executive director of the American Association of Architects Iowa, in a news release. “We expect higher levels of volatility in the design and construction sector once the political scene settles.”

The Architecture Billings Index, an indicator of future construction activity, slipped to 51.5 in July from 52.6 in June, but remained above growth neutral — a reading of 50. The index reflects the approximate nine- to 12-month lead time between architecture billings and construction spending.

American Association of Architects (AIA) Chief Economist Kermit Baker said concerns about the outcome of the November presidential election are likely to persist until Americans go to the polls on Nov. 8.

“We would expect higher levels of volatility in the design and construction sector in the months ahead,” Baker said in the AIA news release.

The ABI scores for each construction sector in July were 55.2 for multifamily residential, 50.7 for institutional, 50.5 for mixed practice, and 50.3 for commercial and industrial.

The Architecture Billings Index is produced by the AIA Economics & Market Research Group, based on the results of a monthly “work-on-the-boards” survey that is sent to a panel of AIA member-owned firms. Participants are asked whether their billings increased, decreased or stayed the same in the month that just ended as compared with the previous month.

Scores above 50 indicating an aggregate increase in billings while scores below 50 indicate a decline.

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